A Critique of the Governor’s Rule Proposal

As a candidate for governor, Jennifer Granholm promised to eliminate mercury emissions from coal-fired power plants. Toward that end, she requested in 2003 the formation of the Michigan Mercury Electric Utility Work Group, which was charged with developing recommendations for an emissions reduction strategy for coal-fired electric generating units. While consensus on a reduction strategy was sought, the group did not reach agreement on reductions in excess of federal requirements.

The governor’s directive, as noted earlier, requires mercury emissions to be reduced in two phases. The first phase will entail adopting the reduction schedule established by the EPA last year. The second phase is supposed to exceed the federal requirements by reducing emissions 90 percent by the year 2015.

In addition, the directive provides for technical and cost-based exceptions to the reduction deadline. For example, a utility would be given additional time to comply if emissions-control technology is installed but testing fails to demonstrate compliance. Additional time also would be provided if a power plant demonstrates that the incremental cost of surpassing the federal requirements exceeds a fixed percentage of the utility’s revenue (the cost threshold is to be determined during the rule-making process).

There are a number of problems with the governor’s proposal. As detailed elsewhere in this report, even complete elimination of mercury emissions in Michigan would not materially affect public health or mercury concentrations in fish. The reduction target of 90 percent is arbitrary; it is not based on exposure risk, the availability of control technology or the cost-effectiveness of emissions reductions.

The deadline of 2015 also is problematic. According to the EPA, the most advanced technology for mercury capture — activated carbon injection — is not available on a commercial basis.[15] In addition, there are no long-term data on the performance of this technology, nor has it been tested on the variety of the power plant systems now in operation. As noted by Gov. Granholm’s workgroup, there exist myriad factors that may mitigate the effectiveness of emissions controls, including:

The types of coal burned.

The design of the boiler and combustion system.

The extremely low level of mercury in flue gas (on the order of several parts per billion)

The chemical form of the mercury.

The properties of the fly ash.

The type of pollution control equipment already installed.

There also are issues related to disposal of the material used to absorb the trapped mercury, as well as byproducts such as fly ash. Although much progress has been made toward developing mercury-specific control technology, much more work remains to be done before commercially viable technologies will be available for use in all types of power plants.

That there apparently will be exceptions in the regulatory
timeline may seem reasonable.[16] But it makes little sense to require technology that is expected to fail. Nor is it rational to base a regulatory deadline on an arbitrarily fixed marginal cost. Regulation can only be justified by comparing costs with benefits — a test that the Granholm plan fails.